Lots of people who either start record labels or who have dreams of doing so don’t necessarily realize what these companies do. Instead, they are often music lovers who simply want to help promote great music that isn’t receiving the attention they believe it deserves. While it’s a wonderful and admirable goal, it doesn’t necessarily make for a solid business plan — just ask the thousands of label owners who have seen their companies disintegrate not long after creating them.
Many who get into the music industry aren’t necessarily known as brilliant business people but if you want to survive, you’re going to need to be smart about everything you do. When it comes to running a company, the first thing that’s an absolute must is coming up with a business plan.
Before getting started, there are a few questions you’ll need to ask yourself — and be able to answer truthfully and honestly. Your answers will define how you go about managing your affairs. First, is this record label going to serve just you and your art or is it your intention to sign other musicians and bands?
Either answer is fine but it should probably be one or the other. If you simply need some legal protection and benefits for your own musical career, a self-owned record label can be a great way to go. However, it’s perhaps not the best option if you’ll be signed to the same roster as other acts, as you are likely to favor your own creations and give yourself an unfair amount of resources and not necessarily because of the quality or sales potential.
Second, what is the purpose of your company? I mean, what do you really want to get out of this venture? Is it just for fun? Are you looking for a way to break into the music industry and you believe this to be it? Are you seeking fame, fortune, and riches? If the last choice is what is truly in your heart, I can’t blame you, but a record label might not be the easiest route to your dream destination (as if there was such a thing).
Be honest with yourself here because it would be a shame to work hard and commit funds to something only to realize later you were doing it for the wrong reasons.
Finally, what will separate your label from the hundreds of thousands of others out there? Will you stick to a certain city or geographic location? Perhaps you want to be known for promoting the best new acts in a certain genre? Or if you think you can make it work, maybe there’s space to succeed working with acts of a certain demographic?
Make sure to choose something you can remain passionate about throughout the hard times and the long hours, as there are sure to be plenty of both. Differentiation is key when it comes to ruling with any business, especially in the crowded music landscape.